Archives of “June 19, 2020” day

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EURUSD falls to new week low and below lower trend line

  
Analysis, Forex
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Falls below Thursday low at 1.11851. Close risk.

It was just a short two or so hours ago that the EURUSd was breaking higher above 1.12256 and running to the 100 hour MA (currently at 1.1255). The price stalled against that MA level (it did the same on Wednesday) and then fell back below the 1.12256 level again.
Falls below Thursday low at 1.11851. Close risk.
The selling has not let up as the clock ticked toward the London fixing at 11 AM ET/1600 GMT.  That took the price below the low from yesterday at 1.1185 and a lower trend line at 1.1178. The low reached 1.11673 and has since bounced back higher.
It’s Friday. It’s the 4 PM London fixing which can lead to increased volatility and liquidity issues. Nevertheless, the holding of the 100 hour moving average just a few hours ago and the subsequent fall continues to show that the bears are more in control. Resistance at the 1.1200 to 1.1206 area now.

ECB, SNB, BOE announce change to Fed swap lines

  
  Analysis

he major central banks mentioned will reduce the frequency of operations

The change will see the 7-day operations be reduced from daily to three times per week, while the 84-day operations will continue to be offered on a weekly basis.

For some context, these measures were what helped to calm the market down by helping to secure enough dollar liquidity to prevent a liquidity crunch from turning into a real credit crunch back in late March. This was the Fed announcement at the time.
The next few weeks/months is going to be interesting as more and more central banks are weaning themselves off these swap lines and that will see some liquidity insurance sapped out of the market.

ICYMI, the Bank of Korea also announced earlier that they won’t holding any more auctions to provide dollar loans using the Fed swap line past the end of the month.

China says that US decoupling is not realistic or wise

  
  Analysis

Comments by the Chinese foreign ministry in response to Trump’s recent remarks on the US keeping the option open to decouple from China

  • Arbitrarily cutting off these chains and changing economic laws is not realistic
  • Such an act will not solve problems in the US, it will only hurt Americans
There’s nothing much to the remarks above as China is just merely touting that this is but a storm in a teacup on Trump’s recent remarks. It’s all election rhetoric at the moment, so expect more of these to continue alongside the play-acting of keeping the peace via the Phase One trade deal as seen earlier in the day here.
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